In the video, undercover camera crews capture gamblers playing slot machines and cashing out in what appears to be a casino in an industrial park outside Austin, Texas.
The five-and-a-half-minute video, shot last spring at so-called Internet sweepstakes cafes, is the product of an undercover sting by the Digital Citizens Alliance, a consumer protection group aimed at cracking down on Internet scams and fraud. But the filming and production was paid for by the American Gaming Association, the Washington trade group representing the casino industry, whose profits and reputation are being hit hard by the illegal gambling operations the video purports to show.
Gaming association officials shared the footage with dozens of state attorneys general’s offices, urging law enforcement to take a closer look at unregulated gambling. They also plan to show it to members of Congress, congressional staff and media outlets.
“It’s a new way to bring light to the issue,” said Geoff Freeman, who took over as president and chief executive of the American Gaming Association in 2013.
Freeman, 40, replaced Frank Fahrenkopf Jr., former longtime Republican National Committee chairman who served as the AGA’s founder and first president for 17 years.
He’s part of a new generation of younger trade group leaders who are deploying a wide range of unorthodox lobbying tactics, a shift reflecting the new normal of the advocacy business.
Like Freeman, some of the new CEOs are as much as two or three decades younger than their predecessors and came to power at the same time gridlock and chaos reigned in Congress. Rather than only forging relationships with federal lawmakers, these influence gurus are turning to state-level lobbying and media campaigns to shape public opinion. Others in the new generation include Katherine Lugar, 45, who took over in 2013 as president and chief executive of the American Hotel and Lodging Association. She is the daughter-in-law of former Sen. Dick Lugar (R-Ind.). Rob Nichols assumed the top spot at the American Bankers Association in May, inheriting the powerful banking lobby from former Oklahoma governor Frank Keating. Nichols, who led the Financial Services Forum for a decade, was a Treasury official in the George W. Bush administration and aide to then-Sen. Slade Gorton (R-Wash.) and ex-Rep. Jennifer Dunn (R-Wash.).
These younger leaders are pushing to remake the image of some trade groups as a cushy track to retirement for former elected officials. Unlike some of his peers, Freeman did not rise up within the industry his group represents, nor was he a member of Congress that championed it. His previous gig was at the U.S. Travel Association, where he similarly boosted membership and promoted a more holistic approach to advocacy that included research and media relations.
“We know that changing the law is going to be a three-to-five-year exercise,” Freeman said. “Year one of our strategy doesn’t even involve Capitol Hill. Whereas a lot of times people would’ve led with lobbying in years past, we’re leading with creating a more informed environment, making sure we’ve built the right relationships and developed the right allies long before we go to Capitol Hill.”
The Gaming Association’s undercover video, the first time the group has engaged in such tactics, is indicative of the unconventional tactics the new CEOs are using to make their case.
“We realize if we want to advance our cause, perception drives public policy,” Freeman said. “So the most important thing we need to address is perception, improve that perception, and create an environment where more favorable public policy is possible. That’s a more strategic approach than perhaps the blunt approach that was taken in years past, of getting things done in the dark of night in smoke-filled rooms.”
Lugar has a similar outlook at the AHLA after years as a top lobbyist for the retail industry, first at the National Retail Federation and later, the Retail Industry Leaders Association. There, she led the lobbying fight on the Marketplace Fairness Act, which would give state governments the authority to collect sales tax from online retailers. In that battle, the retail industry sought and received the support of governors in 26 states and more than 100 state and local trade associations.
“We took [the issue] to the states first,” Lugar said. “We’re doing something similar here, helping our industry drive our story and being more proactive.”
In the last 18 months, the hotel industry group has tripled its membership from 8,000 to 23,000, doubled its revenue to $14 million and tripled the resources in its political action committee, HotelPAC, to $650,000. Lugar says she has her eyes on $1 million.
Lugar is beefing up AHLA’s advocacy strategy “to be more like a political campaign than traditional lobbying,” she said. That means doubling down not just in Washington, but also at the state and city level on labor, wage and other issues.
In Los Angeles, the association is fighting a law passed by city officials last year that requires workers at large hotels to earn at least $15 an hour. AHLA, along with the Asian American Hotel Owners Association, sued the city, saying the ordinance unfairly singles out hotels and violates federal labor laws. They lost the case in May, but are appealing.
In Washington, AHLA fought hard to oppose the merger between online travel sites Orbitz and Expedia, arguing the deal would drive up distribution costs for hotel operators. The Justice Department approved the deal in September, but Lugar says her group’s work helped establish a narrative and raised legislators’ awareness on the issue.
“If another merger happens, the lens will be much more sensitive to antitrust issues,” she said.
Under Freeman’s watch, the Gaming Association grew its membership about 50 percent, hired a new public affairs executive and emphasized more media outreach. It is also expanding efforts to meet with lawmakers in Colorado, Iowa, Pennsylvania and other states where casinos operate.
“Our industry, born out of Nevada, has relied heavily on the Nevada delegation and certainly benefited from the great leadership of [outgoing Senate Minority Leader] Harry Reid and his unique role to promote and protect the industry,” Freeman said. “We have a challenge in Reid’s departure … to develop more champions, tell our story and encourage others to pick up that mantle.”
Nichols, 46, is tackling generational issues in banking, such as how to better market services to millennials, some of whom see little need for a traditional bank, and how to recruit young people to work in the financial services sector. He’s spending a good chunk of his time meeting personally with banking executives to navigate, among other things, how the industry is adapting to technology such as mobile banking and the cybersecurity concerns.
“I’ve been doing considerable outreach, spending the better part of my two months on the job at 30,000 feet, meeting with stakeholders and CEOs at banks across the country,” Nichols said. “I joke about advancements in human cloning so I can push the regulatory bill on the Hill and meet with bank CEOs across the country and be a husband and father to young kids.”
Nichols says he’ll be bringing his children, ages nine and 10, to some association gatherings.
“As a younger association leader … I’m in a different life station,” he said. “I love the life station I’m in but it’s a different one than someone might anticipate with an association CEO.”